Italy as Borrower The Italian issue of foreign bonds is
not likely to have an enthusiastic reception. The reasons for the issue are dear. Italy has heavy obligations to meet, in Abyssinia and in Europe ; but she has already mobilised all Italian investments abroad and drawn as deeply as she can on her reserves. Her exports have dropped by a half and do not pay for essential imports. Indeed, as the new bonds are specifically given the status of bills of exchange, it seems as if they were meant,primarily to relieve Italy's foreign exchange difficulties. But the terms of the issue are not attractive. The promise to repay. in periods up to .86 months must be regarded merely as a promise, with no guarantee of capacity to fulfil it. The rate .of interest quoted (a minimum of .5 per cent.) is much below the rate at which. Italy - could raise loans abroad. Foreign lending in such a case is officially disapproved in Great Britain and . forbidden by the Johnson Act in the United States : it is probable, indeed, that the issue is meant primarily for the South American market. In itself it is evidence of Italy's financial difficulties ; and it contrasts oddly with Signor Mussolini's frequent boasts that Italy will finance her undertakings, in Abyssinia and Europe, out of her own resources. Italia fora da se—with the help of foreign investors.
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